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David vs. Goliath update




I first posted on this subject in October '08 and then again about two years ago. In my original post I predicted that "we could see Apple surpass Microsoft's market cap within a few years." As it turns out, Apple's market cap eclipsed Microsoft's about one year ago.

Back in late 1999, Microsoft reached a peak capitalization of just under $600 billion, while Apple was worth a mere $17 billion at the time. Since then, AAPL investors have gained about $300 billion, compared to the $375 billion that MSFT investors have lost.

I've been an Apple fanboy ever since purchasing my first Mac in 1987, and I have used both Macs and PCs almost daily ever since, so I'm intimately familiar with both. I've owned AAPL stock for about 10 years now, and I haven't changed my mind: Apple makes better computers and a better OS than Microsoft—better than anyone else, for that matter. Apple also has become the most successful computer technology innovator the world has ever seen.

Apple was the first to commercialize the graphical user interface for personal computers, and it has since set the standard for music players, smartphones, laptops, and tablet computers. Microsoft and other would-be competitors have been reduced to copying and piggybacking on Apple's achievements. Apple leads, and others follow, in a market that now amounts to billions of potential consumers all over the world. This is heady stuff and I doubt the dynamics will change meaningfully in the foreseeable future.


Full disclosure: I am long AAPL at the time of this writing.

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